White Oak Commercial Finance and Hilco Global Close $192M Senior Secured Credit Facility for Royal Cup Coffee and Tea Acquisition
White Oak Commercial Finance (WOCF) and Hilco Real Estate Capital have closed a $192 million senior secured credit facility for Royal Cup Coffee and Tea, a national provider of beverage and equipment solutions, the firms announced June 4. The financing supports Royal Cup's acquisition of Farmer Brothers Coffee Co. and provides ongoing working capital for the combined business.
Deal Structure and Financing Terms
The facility is comprised of a $155 million revolving credit line and a $37 million term loan. White Oak Commercial Finance acted as sole lead arranger and sole lender on the revolver. Hilco Global served as administrative agent on the term loan, with White Oak Commercial Finance acting as co-lender on that portion of the facility.
Royal Cup Coffee and Tea is a portfolio company of Braemont Capital. The transaction is described as a lower-middle-market financing solution structured to support the acquisition and fund integration costs as the two companies combine operations.
"We're pleased to provide a flexible facility structure that supports Royal Cup's vision of building a national platform," said Mark Allen Smith, Managing Director, Originations at White Oak Commercial Finance.
Andre Hakkak, CEO and Co-Founder of White Oak Global Advisors, described the financing as structured to support continued growth while providing flexibility for integrating the combined platform. "This transaction represents an important milestone for Royal Cup as it expands its market presence and strengthens its operational capabilities through the acquisition of Farmer Brothers," Hakkak said.
Acquisition Expands National Footprint and Manufacturing Capabilities
The acquisition of Farmer Brothers Coffee Co. — formerly listed on the Nasdaq under the ticker FARM — is intended to expand Royal Cup's national footprint, manufacturing capabilities, and route density. Royal Cup serves customers across the foodservice, hospitality, convenience, office, and specialty coffee markets in the United States, Mexico, Canada, and the Caribbean.
Royal Cup has operated since 1896 and manufactures and distributes coffee and tea in a variety of flavors and formats. The addition of Farmer Brothers is intended to strengthen the company's position across key commercial beverage end markets.
Lender Appetite for Private Credit in the Lower Middle Market
Ian Fredericks, CEO at Hilco Global Capital Solutions (Americas), said the transaction reflects continued demand for bespoke financing in the lower middle market. "This transaction highlights the strength of the lending group and the continued demand for creative, scalable financing solutions in the lower middle market," Fredericks said. "Hilco Global is pleased to provide capital support that positions Royal Cup for long-term operational and strategic success."
White Oak Commercial Finance is an affiliate of White Oak Global Advisors, which offers asset-based lending, factoring, inventory financing, supply chain financing, and related products. The firm and its affiliates have deployed nearly $28 billion since its inception in 2007 and maintains offices in the U.S., U.K., and Australia.
Hilco Global, a subsidiary of ORIX Corporation USA, provides capital solutions and professional services across the retail, commercial and industrial, real estate, manufacturing, and brand sectors. The firm is headquartered in Northbrook, Illinois, and operates with more than 810 professionals on four continents.